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Business Law (Research Paper Sample)


Discussing various elements of the law of contract

International Business Law
Possible stages of formation of a valid contract
Agreement stage
This is the first stage of contract formation. It involves the conversion of negotiation into a complete deal or bargain. At this stage, the negotiations cannot be considered as a contract, has it is not legally possible to implement these negotiations. For the negotiations to be legally binding, the question on whether the involved parties have come to an agreement should be addressed, and this is where the rules of offer and acceptance apply. Based on the law, an agreement is only reached when the offer made by one party is accepted by the other. To be more specific, an agreement between two contracting parties is said to have been reached when an acceptance is communicated. For a valid contract, the must be a valid offer and acceptance (Collins, 11-16).
Consideration stage
This is the second stage and it entails a conception of exchange. Various rules are applied in establishing what comprises of an exchange, and what a good consideration is made of. Notably, exchange of promises is the product of acceptance, and it is the same thing that makes the consideration. At this stage, there can be said to be a legally enforceable agreement between the two contracting parties. In case there is breach of contract from one party, a legal action can be taken by the other party to seek damages for breach of contract (Roger and Gaylord, 59-62).
Intention to create legal relations
The third and last stage of a valid contract is the intention of creating legal relations between the contracting parties. The main aim of a contract is legally bind the involved parties. As such, it ensures that the contracting parties are committed to executing their obligations as pointed out in the agreement. Therefore, it gives the parties an opportunity to undertake a legal action for any party who fails to honor his/her obligations as agreed in the contract.
Fundamental difference between ‘CIF’ and ‘FOB’
This is a term of sale that imply that the price that has been quoted by the seller covers not only insurance, but also all the charges up to the stated destination. The most important element of a contract under CIF is that bargain performance is accomplished when the documents of delivery are delivered and not necessarily delivery of goods by the seller.
This is a term of sale under which the quoted price covers all costs up to placing the goods on transportation vessel stated by the buyer. It is flexible in the sense that while that buyer has to decide on the ship, the seller ensures that the goods are in on board of vessel
Differences between the two
Based on the English Law, CIF and FOB can be differentiated under the rights and duties of the seller, the rights and duties of the buyer, passing of title, and passing of risk.
Under rights and duties of the seller, based on FOB, the major duty of the seller is loading the goods. It is the responsibility of the seller to ensure that the goods are delivered on board the vessel according to the terms of the agreement. However, based on CIF in addition to the requirement of delivering the goods on board of the vessel as agreed, he/she also has the option of procuring the already shipped goods afloat. The other difference is that under FOB, all handling, transportation of goods to the ship, and loading costs are met by the seller. However, the seller is not reliable for freight costs (Roger and Gaylord, 19-22). On the other hand, under CIF, the seller is reliable for all the costs of the goods up the point of delivery of the goods on board of the vessel. In addition, it is the duty of the seller to insure the goods an provide a contract of carriage. The insure policy should be aimed at protecting the buyer.
Based on the rights and duties of the buyer, under FOB, it is duty of the buyer to decide on the port of shipment unless stated otherwise, in addition to procuring a ship, and deciding on the shipping time. However, under CIF, the main duty of the buyer is to accept the documents, and he has no role to play in procuring or deciding shipping time. The other difference is that, Under FOB, it is the duty of the buyer to pay the price as agreed, but only as soon as the goods are delivered by the seller. On the other hand, under CIF,, the buyer must pay for the goods on accepting the documents. Besides, once the goods are delivered the buyer has to meet all the unloading costs (Beatty and Samuelson, 101-107).
In terms of passing title, under FOB, the buyer acquires the title of the goods once they have been placed on board the vessel. This is because in addition to getting ownership of the goods at this point, he also becomes the shipper, holding contractual association with the carrier. On the other under, based on CIF the buyer acquires title of the goods only after receiving the documents.
Finally, in terms of passing of risk, under FOB, the seller is not responsible for any risk once the goods are delivered on a ship’s rail, because risk passes on shipment. However, under CIF, risk passes on under two conditions. First, it is when the seller delivers the goods on board the vessel as agreed, and second, when the seller bought afloat goods, making the goods subject of the agreement, meaning that risk passed as from shipment (Collins, 33-35).
Characteristics of a tort
Under the English law, a tort is described as breach of duty, which may lead to a legal action for damages. Tort law is applied in circumstances where an individual’s behavior unjustly causes harm or loss to another individual (Schafer, 1999). It is worth noting that a tort needs not to be an illegal act, but the element of causing harm allows the victims to take a legal action to recover the loss or harm. A tort can be intentional or unintentional. An intentional tort occurs when a individual consciously causes harm or loss through his/her actions on another individual, while on the other hand, unintentional tort occurs without the knowledge of the tort-feasor (Cooke, 31-36). A tort is characterized by a number of features, as outlined below.
Tort-feasor or wrong doer
This refers to the person who has committed a tort, and whom a legal action is taken after.
Trial in civil courts
Legal proceeding concerning a tort is undertaken in civil courts, unlike criminal offenses, which are tried in a criminal court.
Remedy of unliquidated damages
Injuries incurred by an individual as a result of another person’s wrongful act can only be remedied through unliquidated damages. This means that only monetary damages can be awarded in case of a tort. However, there are other circumstances where other remedies besides monetary damages are awarded.
Duty of care
In a tort, there must be an element of duty of care, where one ind...
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